Skycity Entertainment Group Limited · NZX:SKC
Skycity Entertainment — H1 FY2006 Earnings Presentation
31 slides from Skycity Entertainment's earnings presentation, February 2006
Slide 1: FY06 Interim Result, Half Year Ended 31 December 2005
SKYCITY ENTERTAINMENT GROUP LIMITED FY06 Interim Result Half Year Ended 31 December 2005
Slide 2: 1H06 cf 1H05
SKYCITY Entertainment Group Limited 1H06 cf 1H05 1H06 1H05 % $m $m $m Movement Movement Revenue $386.3 $349.8 10.4% +$36.5 EBITDA $154.6 $150.8 2.5% +$3.8 EBIT $119.7 $121.6 1.6% -$1.9 Net Profit $58.6 $59.6 1.7% -$1.0 Earnings per Share 14.0cps 14.3cps 2.1% -0.3cps - 1H05 restated for IFRS. 1H05 Ne
Slide 3: 1H06 cf 2H05
SKYCITY Entertainment Group Limited 1H06 cf 2H05 The summary below compares the 1H06 result against the preceding half year period (2H05) which was the first period after implementation of smoking bans in New Zealand and smoking restrictions in South Australia. These comparisons show a significant t
Slide 4: FY06 First Half Result Profits and Distributions
FY06 First Half Result Profits and Distributions Net Profit : $58.6m Interim Dividend/Distribution NZ$m 12.0cps 7/4/06 $59.6m cps 60 $58.6m $55.1m 12.0c 12.0c $51.7m* 11.0c 50 10.5c 10 40 $37.9m* 7.75c $33.2m 7.0c 30 $27.7m 6.0c 5 20 10 0 0 1H00 1H01 1H02 1H03 1H04 1H05 1H06 1H00 1H01 1H02 1H03 1H04
Slide 5: Key Elements of the 1H06 Result
Key Elements of the 1H06 Result + Group Net Profit has shown strength in the post smoking ban implementation period with the 1H06 net profit result only marginally below the 1H05 period. The majority of the 1H05 comparative period was prior to the introduction of smoking bans in New Zealand and smok
Slide 6: Key Elements of the 1H06 Result (continued)
Key Elements of the 1H06 Result (continued) + Earnings performance (EBITDA, EBIT) shows strength across the Group, as summarised below: – SKYCITY Auckland in line with 1H05 (despite smoking bans) due to strong performances from gaming, convention and restaurant operations and the new revenue stream
Slide 7: Key Elements of the 1H06 Result (continued)
Key Elements of the 1H06 Result (continued) – SKYCITY Hamilton’s revenues and earnings were supported by the new entertainment facilities acquired as part of the acquisition of the Riverside Entertainment Centre – Christchurch Casino is performing in line with prior period, despite the smoking ban i
Slide 8: Interim Distribution (Dividend)
Interim Distribution (Dividend) + 12.0 cents per share (12.0 cps 1H05) + Entitlement/record date 10 March + Payment date 7 April + New structure for the 1H06 interim distribution as a non-taxable bonus share issue but with a cash alternative available (fully- imputed). The cash alternative will leav
Slide 9: Interim Distribution (Dividend) (continued)
Interim Distribution (Dividend) (continued) + A flexible distribution structure in the best interests of shareholders – reduced cash distribution and imputation credit utilisation – distribution in shares with cash alternative – can elect full or partial cash conversion/retention of shares – can ele
Slide 10: Operating Revenues
FY06 First Half Result Operating Revenues NZ$m 10% 400 $386m 18% $41m $350m 3% 350 5% $43m(3) A$46m 13% $296m 13% 20% 300 $283m 17% A$39m(4) $31m $38m $250m A$66m 22% 24% 18% 250 48% $25m $213m A$53m A$53m A$56m 13% 6% 200 A$41m A$47m 13% 150 $144m $160m $168m $192m $198m $206m $224m 13% 11% 5% 14%
Slide 11: EBITDA
FY06 First Half Result EBITDA NZ$m 3% 16% $155m 160 $151m $15.5m(3) 4% $17.5m (2) 11% 140 24% $130m 41% $125m A$18.0m $12.4m(1) A$16.1m(4) 12% $9.0m 120 38% 7% 36% A$13.8m $101m A$11.9m A$11.7m 18% 38% A$11.7m 2% 2% 100 $94m $6.6m 60% A$9.0m A$7.3m 19% 80 60 $69m $82m $85m $101m $104m $103m $105m 15
Slide 12: Operating Revenues and EBITDA Notes
FY06 First Half Result Operating Revenues and EBITDA Notes re Revenue Graphs (page 10) (1) Other New Zealand Operations include SKYCITY Hamilton, SKYCITY Queenstown, SKYCITY Leisure and Christchurch Casino. SKYCITY Hamilton commenced operations September 2002, SKYCITY Darwin acquired July 2004, 40.5
Slide 13: Revenues and EBIT Composition
FY06 First Half Result Revenues and EBIT Composition Group Revenues EBIT Gaming/Non-Gaming $386m $120m Revenues Auckland NZ$224m 58% Auckland NZ$84m 70% Other NZ NZ$41m 11% Other NZ NZ$12m 10% Gaming $295m 76% Adelaide A$66m 18% Adelaide A$9m 8% Non-Gaming $91m 24% Darwin A$46m 13% Darwin A$14m 12%
Slide 14: Auckland: Comparison to 1H05
SKYCITY Auckland FY06 First Half Result Comparison to corresponding prior period (1H05) Revenues $223.5m 8.6% +$17.7m - Gaming $177.1m 4.5% +$7.7m - Other $46.4m 27.5% +$10.0m EBITDA $104.7m 1.4% +$1.4m EBIT $84.1m 2.8% -$2.4m + EBITDA, despite smoking ban implementation, up 1.4% at $104.7m. EBITDA
Slide 15: Auckland (continued)
SKYCITY Auckland FY06 First Half Result (continued) Key features of the 1H06 result comparison to corresponding prior period (1H05): + 1H06 Revenue, EBITDA and EBIT comparisons to immediately prior period (2H05), being the first period post smoking ban implementation, show increases of 16%, 12% and
Slide 16: Auckland (continued)
SKYCITY Auckland FY06 First Half Result (continued) + Excellent customer response to the new Platinum Room facilities and a good response to the Quickticket feature by higher-end machine players + Table game revenues up 14.0%. Excellent local and international customer response to the new members’/V
Slide 17: Other New Zealand Operations
Other New Zealand Operations Hamilton Queenstown(1) Christchurch(2) Leisure $m 1H06 1H05 1H06 1H05 1H06 1H05 1H06 1H05 Revenue $16.5 $16.5 $2.8 $3.4 $2.7 $4.5 $18.9 $18.2 EBITDA $7.9 $7.4 ($0.1) $0.3 $2.7 $4.5 $5.2 $5.4 EBIT $5.7 $5.2 ($0.6) ($0.1) $2.7 $4.5 $4.2 $4.3 (1) Results are for SKYCITY Que
Slide 18: Hamilton
SKYCITY Hamilton FY06 First Half Result Comparison to corresponding prior period (1H05) Revenue $16.5m Steady EBITDA $7.9m 6.8% +$0.5m EBIT $5.7m 9.6% +$0.5m + Revenues steady compared to 1H05 (despite smoking bans from December 2004) but cost and margin management has led to increases in EBITDA and
Slide 19: Queenstown
SKYCITY Queenstown FY06 First Half Result + A number of external factors adversely affected the Queenstown result for 1H06, namely: – poor ski season – lower summer visitation to the Queenstown/Southern Lakes region – lower than anticipated visitation by international player groups + Revenues and EB
Slide 20: Christchurch Casino
Christchurch Casino FY06 First Half Result + Christchurch Casino is now accounted for by SKYCITY as an Associate (equity-accounted) under IFRS - previously accounted for as an Investment (dividends and interest received) + Christchurch Casino is trading in line with prior year despite introduction o
Slide 21: Leisure
SKYCITY Leisure FY06 First Half Result + Revenues up 3.8% at $18.9m (1H05 $18.2m), EBIT margin steady at $4.2m (1H05 $4.3m) despite increased competition in Auckland cinema market and lack of strong box-office product + Blockbuster films King Kong and Chronicles of Narnia released late in the half -
Slide 22: Adelaide: Comparison to 1H05
SKYCITY Adelaide FY06 First Half Result Comparison to corresponding prior period (1H05) Total Revenues A$65.7m 17.5% +A$9.8m - Gaming A$56.4m 12.4% +A$6.2m - Other A$9.3m 63.2% +A$3.6m EBITDA A$13.8m 17.9% +A$2.1m EBIT A$8.5m 14.9% +A$1.1m + Revenues, EBITDA and EBIT up strongly on corresponding pri
Slide 23: Adelaide (continued)
SKYCITY Adelaide FY06 First Half Result (continued) Key features of the 1H06 result comparison to corresponding prior period (1H05): + Strong increases in gaming (machines +19.7% and tables +7.5%) and food and beverage revenues (+48%) from the new facilities (Stage 1 of the redevelopment project: ne
Slide 24: Adelaide (continued)
SKYCITY Adelaide FY06 First Half Result (continued) + Compared to 2H05, 1H06 gaming machine revenues were up 18%, table games revenues up 24% and food and beverage revenues up 53% + Award of Distinction at the 2005 South Australian Tourism Awards for the new Southside (Stage 1) development - new gam
Slide 25: Darwin
SKYCITY Darwin FY06 First Half Result + SKYCITY acquisition of MGM Darwin occurred on 22 July 2004. The 1H05 comparative figures for Darwin have been grossed up from 5.3 months to 6 months to facilitate the comparison of the 1H06 result with the 1H05 result on a like with like basis Total Revenues A
Slide 26: Darwin (continued)
SKYCITY Darwin FY06 First Half Result (continued) Key features of the 1H06 result comparison to corresponding prior period (1H05): + Gaming revenues up 4.9%* (machines +12.9%, tables +5.5%, slots rebate -A$2.4m) despite removal of community slots rebate from 1 July 2005 + Hotel revenues up strongly
Slide 27: Darwin (continued)
SKYCITY Darwin FY06 First Half Result (continued) + SKYCITY Darwin received two Northern Territory tourism awards for “Best Luxury Accommodation” and “Tourism Restaurant and Catering Services” + Economic momentum continues in Darwin although the “wet” season impacts the SKYCITY Darwin second half re
Slide 28: Capital Efficiency, Gearing
Capital Efficiency, Gearing + Gearing ratio at 38.5% is towards the upper end of the 30%-40% range but, given SKYCITY’s strong cash-based earnings, this gearing level is seen as prudent, appropriate, and capital efficient + Funding cost for 1H06 was reduced by $5.3m due to interest rate swap and for
Slide 29: IFRS
IFRS + SKYCITY has adopted New Zealand International Financial Reporting Standards (NZ IFRS) from 1 July 2004 + The company has IFRS-restated its net profit for the half year ended 31 December 2004 and the full year ended 30 June 2005, and its balance sheets as at 1 July 2004, 30 June 2005 and 31 De
Slide 30: IFRS (continued)
IFRS (continued) + The impact of the IFRS restatements on previously reported results is relatively insignificant – net profit 1H05 : as originally reported (Feb ’05) $57.1m : IFRS-restated* $59.6m – net profit FY05 : as originally reported (Aug ’05) $104.0m : IFRS-restated* $106.4m NZ IFRS remains
Slide 31: SKYCITY as at February 2006
SKYCITY as at February 2006 + SKYCITY’s operating units are well-placed moving into 2H06 with smoking ban impact abatement in line with or now marginally ahead of previous guidance + Significant turnaround achieved in 1H06 from the preceding half year period (2H05) which was the first half year peri
SKYCITY Entertainment Group — H1 FY2006 Earnings Presentation on 6ix